Blended Family Estate Planning: Careful Consideration Required

Estate Planning and Litigation

Estate practitioners loath the term “simple will” and always advise clients to seek advice when planning for succession. When it comes to blended families, there are no two ways about it – estate planning is never going to be “simple”. I’ve previously written about the “Sword of Damocles” affect wills variation can have on estate planning. When planning for succession in blended families, take all the risks and issues that can arise and then add multiple families to the mix. Either the families must plan properly, or face massive headaches down the road – for the surviving spouse and children.

Blended families are generally referred to as those relationships, either in common-law or marriage, where one or both partners have children from previous relationships. They may also have children together from their current relationship.

The issue for blended families is numerous. In addition to estate planning, there are also concerns of incapacity or separation. For the purposes of today’s article, we’ll focus on estate planning.

The most obvious issue when it comes to blended family estate planning is that the interests of the spouses will likely compete with one another. One spouse may wish to leave more to their own child than to the other spouse and their children. Other concerns also include death and remarriage, the existence of a separation or marriage agreement, or the needs of the spouse and children. More so, details such as the length of the relationship, how marriage assets are held, and who brought what into the relationship can also play a factor in a discussion on blended family estate planning.

What is the affect of a blended family on estate planning?

Let’s take a common scenario. John and Martha are married. John has two children from his previous marriage. Martha has one child from her previous marriage. John did not adopt Martha’s child. Martha did not adopt John’s children. John and Martha did not feel like they needed to seek legal advice and drafted, what they thought they needed, a “simple will”.

The terms of John’s will were that after he passes, Martha would receive the entirety of his estate; in the event that Martha predeceases him, his “children” would receive his estate equally. Martha’s will was a mirror of John’s with her “children” receiving her estate.

John passes away. What happens to John’s estate? In this example, Martha would receive all the assets from John’s estate that went by way of John’s will. John’s two children would receive nothing.

Once the assets pass over to Martha, she can do what she wants with those assets free and clear of any legal encumbrance. More so, they then form part of her estate. Martha can distribute the assets according to her wishes, and her will. If Martha were to pass away without drafting a new will, all of her assets would be left to her “children” – being her sole child.

After John’s death his children have two options. Hope that Martha will leave something in her will for them, or, the more likely scenario, file a costly law suit in order to change their father’s will. Remember, Martha has no legal obligation under the Wills, Estates and Succession Act to her step-children. After she passes, if she does not create a new will, all of her assets would flow to her child.

As discussed in previous articles, any litigation is going to devastate relationships, and reduce the amount of money left for anyone. The above just takes one relatively common scenario when it comes to blended family estate planning. The most important take away is that when you have blended families, estate planning is essential. There are very important legal issues that must be addressed to mitigate litigation, a shrunken estate, and most importantly, disappointed beneficiaries.

Sukhminder Virk
Associate Lawyer in Estate Planning
Lindsay Kenney LLP – Langley Law Firm